Spectrum

Competitive Field of Spectrum Bidders Benefits Everyone

As featured on Daily Kos 
By: Mike Montgomery

$12 billion.

That’s a lot of clams, even to the federal government. But that’s approximately how much the Federal Communications Commission (FCC) will be leaving on the table if they restrict some bidders during their upcoming spectrum incentive auctions, according to economists Robert J. Shapiro, Douglas Holtz-Eakin, and Coleman Bazelon. In their study published by Georgetown University, “The Economic Implications of Restricting Spectrum Purchases in the Incentive Auctions,” the trio warn that limiting just two participants — Verizon and AT&T — from taking part in spectrum auctions could “reduce auction revenues by about 40 percent.”

But wait, there’s more. The group also estimates that forcing certain providers to watch from the sidelines could raise consumer bills by 9 percent. In short, the federal government will be refusing money, and consumers will be paying more money for their wireless service.

If that sounds backward to you, you’re not alone.

The fact of the matter is providers big and small desperately need more spectrum to meet the customers’ demands. The unprecedented popularity of smartphones and tablets — and all the mobile data their owners use — are taxing networks. It’s a problem former FCC Chairman Julius Genachowski called “America’s looming spectrum crisis.” And unless more airwaves are freed up for wireless use soon, the word “looming” will no longer apply.

Congess’ bold incentive auctions — which, in a nutshell, will enable broadcasters to voluntarily sell their spectrum holdings in exchange for compensation — are aimed at helping alleviate this problem. On paper, the auctions could be a boon for both the broadcasters and the federal government, and wireless providers will be able to breathe a bit easier knowing their networks won’t suddenly seize up due to overcapacity. Call it a win-win-win.

Actually, call it four wins. The tech industry will also benefit, since more spectrum will mean more powerful and reliable wireless network capabilities. Bigger pipes, as they say, for bigger ideas.

But in order for us to rack up all these wins, the FCC must ensure the same rules apply to every bidder across the board. Restricting some carriers from being able to purchase the spectrum they need at auction won’t foster competition; if anything, it fosters the spirit of uncompetitive behavior.

Whatever framework the FCC decides upon should depend on two factors: getting the most bang for the spectrum buck, and perhaps more importantly, ensuring that those bidding are able to put newly acquired spectrum to use quickly and efficiently. After all, airwaves purchased and locked in the vault won’t help anybody.

That’s what makes the idea of restricting some providers from fully participating in the spectrum auctions about more than the potential loss of billions in much needed revenue for the federal government. In the end, consumers — the very ones the FCC are theoretically trying to help — will end up losing the most, either through higher prices or declining service quality. Those are two consequences consumers shouldn’t have to face.

View the article on the Daily Kos website here

Broadband + Education = Bright Future

There was some good news on the education front, courtesy of The White House:

“Today, President Obama called on the Federal Communications Commission to take the steps necessary to build high-speed digital connections to America’s schools and libraries, ensuring that 99 percent of American students can benefit from these advances in teaching and learning. He is further directing the federal government to make better use of existing funds to get this technology into classrooms, and into the hands of teachers trained on its advantages. And he is calling on businesses, states, districts, schools and communities to support his vision.”

The tl;dr read version: President Obama wants every student in America online. And he wants it to happen sooner rather than later.

Smart. Students today are better served by carrying a tablet rather than a backpack full of books, especially if they’re going to learn the skills they’ll need to play in the global economy and avoid future back pain.

But hitting the president’s mark will take more than words, especially with cities and school districts strapped for dough. Broadband networks don’t build themselves, which means continued private investment — and a regulatory environment that encourages it, both on the state and federal level — will be key.  Connecting 99% of students isn’t a moon shot, by any means, but it is a heavy lift. This means everyone, from government to business, needs to roll up their sleeves and work together to get it done.

Two Days With Touré

As a strong proponent of preserving the Internet as a platform for communication and commerce kept free from burdensome regulation, I geeked out when I knew I would be spending time with the guy I perceived as leading the charge against our virtuous, sacred Internet.

I refer, of course, to the head of the International Telecommunication Union (“ITU”), Dr. Hamadoun Touré, who convened the World Conference on International Telecommunication (“WCIT”) late last year. I expected Dr. Touré to be the Internet’s equivalent of a goose farmer cultivating foie gras, force-feeding regulation down the Internet’s throat.

But for all the criticism heaped upon the ITU for its goals and process before, during and after the WCIT, I was surprised by a few of the notes Touré struck during his visit to Stanford University. During his keynote speech, Touré advocated for every single draconian proposed change to the world’s telecommunications laws, which was exactly what I expected from him. But what really stood out to me was his recognition of the need for updated communications infrastructure.

Touré spoke of all-IP (Internet protocol) networks springing up around the world and the need to embrace this technological advance as the next frontier in a hyper-connected world. He told the sold-out crowd that nations around the world are installing these IP networks with great success, spawning the creation of exciting micro-economies that didn’t previously exist. Touré implied that the U.S. has an opportunity to lap the rest of the world in terms of installing all-IP networks. Extrapolating on Touré’s statement, the U.S. must speed the transition in order to continue to stay ahead of the curve domestically while retaining our competitive edge globally.

Interestingly, while Dr. Touré seems to prescribe regulation as the solution to virtually every problem facing the Internet, his answer to the question of how to encourage faster and greater deployment of IP networks stands in stark contrast to that position. Oh the irony! He says the way to go is “light-touch regulation,” which limits the extent to which government should intervene with the management of the Internet ecosystem.

Obviously, I didn’t agree with everything Dr. Hamadoun Touré had to say over the course of the two-day Stanford symposium. However, I was thrilled to learn that the leader of the ITU is a vocal opponent of heavy regulations when it comes to transitioning the United States to the IP future we so desperately need.

Follow Mike Montgomery on Twitter: www.twitter.com/@calinnovates

There’s Something Crazy in the Air

Bananas.

That’s the best way to describe the current state of the wireless industry. Absolutely bananas.

Smartphones, tablets, LTE-enabled laptops, wirelessly connected cars… each day brings some new gadget, some new device tapping into the power of wireless networks. There are north of 300 hundred million people in the U.S., and according to Pew some 85% of them now own a cellphone. Of that group, 58% have upgraded to a smartphone. Do a little scribbling on the back of an envelope and you get something around 135 million people walking around with a wireless connection to the Internet in their pocket.

That’s a lot of people pushing out a lot of data. Billions of bytes, 24 hours a day. And all that traffic, all those bits and bytes and gigs, they all require spectrum to travel from points A to B, which is why wireless providers are currently on major shopping sprees. Investing billions to acquire more airwaves. Swapping frequencies in different markets. Working with the government to free up more spectrum in order to keep up with demand.

Earlier this month, T-Mobile merged with smaller provider MetroPCS. Early last week, satellite TV provider DISH Network pitched north of $25 billion to acquire wireless provider Sprint — a bid above what Japanese company SoftBank had also offered for the company. And those are just the two most recent moves. As mobile broadband continues to explode in popularity, there are going to be many more deals to come.

Call it a free market frenzy. A wireless lollapalooza, even. As the Federal Communications Commission continues to creep toward its proposed spectrum incentive auctions — which will, hopefully, free up a ton more spectrum for wireless use — providers aren’t waiting around. They can’t afford to. The wireless industry is one of our most vibrant sectors, and a big reason for that is competition. Even the biggest players are constantly forced to invest billions in order to meet the demands of their customers.

In such a highly competitive environment, the best thing the government can do is keep things from slowing down. That starts with ensuring the FCC auctions are open to every player willing to make the investment in — and quickly put to use — newly freed up airwaves. Hitting that mark will bring the government the most bang for its spectrum buck. It will also provide customers and the tech community with more robust networks. Ones that are able to keep up with innovations just around the corner.

The government can also help by encouraging wireless providers to work together in order to meet the challenge of ever increasing demand. As DISH’s flirting with Sprint shows, there’s no shortage of players hoping to get into the provider game. But even with the FCC’s auctions, it will take providers striking deals with each other to keep connections strong and the industry growing.

By focusing on smart oversight, regulators can protect consumers and maintain a vibrant wireless industry at the same time. That way, when it comes to the future of the industry,bananas will be just the beginning.

Follow Mike Montgomery on Twitter: www.twitter.com/@calinnovates

We Could End Up Striking Out On Spectrum

There’s no doubt fall is a great season for sports fans.  With the MLB playoffs and football season around the corner, fantasy drafts, trash-talking and tailgate recipe research is in full swing online.  Thanks to technological advances, sports and sports fans have gone mobile as sports enthusiasts, like other consumers, embrace connected devices in just about every aspect of their lives.

Online video sites such as MLB.TV allow fans to stream every game online.  A recent MLB Advanced Media chart shows that from the 2011 to 2012 baseball seasons, online viewership on only desktops fell by almost half, and viewership via a combination of desktops, smartphones, Xboxes and other connected devices nearly doubled.  And for many fans that only stream NFL games online, providers now offer online viewing packages, sending streaming videos of games to mobile devices.

TV ads illustrate the opportunities of wireless technology – sneak a peek at the score while you’re waiting to order dinner, watch your favorite team while you’re on a trip away from home – but as we embrace how technology supports greater connectivity in every aspect of our lives, there is another question at hand:  How do all the possibilities in online technology impact the consumer experience?

People are streaming video at an unprecedented rate on an array of devices, creating a surge in wireless data traffic.  All indications are that investment in network infrastructure is strong as providers strive to give customers more of what they want.  But in order for consumers to enjoy high-quality video without loading bars and interruptions, we need wireless spectrum, the airwaves that carry data over wireless networks.  The problem is only a small percentage of available spectrum has been allocated for commercial wireless use.

With skyrocketing consumer demand, the current spectrum supply just won’t meet consumer needs.  Spectrum is projected to be maxed out by 2013.

This isn’t an issue that can be allowed to languish in the off-season.  The federal government must take immediate steps to release more spectrum for consumer use to better meet their needs.  In areas of health care and education, the consequences of not doing so are more serious than a Facebook post touting the winning field goal.  21st century policies must encourage innovation and private investment in our network infrastructure so that consumers can continue to enjoy all of technology’s possibilities today and in the future.

If You Care About Our Wireless Future, Here’s A Recommendation for Summer Reading

It’s August, and much of official Washington soon will be heading to the beaches and mountains to get away from the heat and humidity here in town.  I hope that telecommunications and technology policy makers will take with them one suggested piece of excellent Summer reading.  The Information Technology and Innovation Foundation (ITIF) released a report last month that should be mandatory reading for anyone involved in helping to set the course of our nation’s technological future.  The report, “Powering the Mobile Revolution:  Principles of Spectrum Allocation” sounds like pretty dry reading, and, candidly, much of it is.  But it also is essential reading if you want a good understanding of what America needs to do to and, as importantly, must not do if we are secure our nation’s wireless future.

Here’s the deal.  We have known for years that continued innovation and investment in wireless technologies will require more spectrum.  The FCC’s National Broadband Plan released more than two years ago noted that the United States would confront a “looming spectrum crunch” unless 500 MHz of additional spectrum is found in the next ten years.  We also know that the most likely, in fact the only feasible, source of additional spectrum is from Federal licensees.  Over the past two plus years we have made virtually no progress in identifying Federal users who might be moved from the spectrum they occupy or bands that might be migrated to private sector commercial or non-commercial use.

Read the Full Article at TheDailyIrv.

Mike Montgomery: Your tacos depend on wireless access

There’s a basic recipe behind the rolling success of food trucks in California: hard times, hot food and a generous sprinkling of wireless technology.

Opening a brick-and-mortar restaurant has always been a high-risk, high-overhead venture. It became even more so as tough times and tight money followed the economic downturn. But with the low overhead and limited capital needed to operate a food truck, budding restaurateurs took a second look at mobile food operations. The recent booming success of food trucks is the latest prime example of how entrepreneurs and small businesses are using reliable wireless connectivity and the ever-growing menu of wireless gadgets to innovate and compete with their larger rivals. If you want a taste of the haute mobile cuisine scene, just hop in your car. You can’t miss it.

Read the Full Article.

Congress Crafts Compromise on Spectrum Auctions

As part of their work on the payroll tax extension legislation, Congressional leaders have included a very important provision that authorizes voluntary incentive auctions for wireless spectrum. We applaud Chairmen Upton and Walden as well as the FCC Chairman Genachowski for their leadership. Despite the politics, compromise ruled the day, demonstrating that Congress and the FCC understand that our spectrum crunch is a very real threat and not in any way theoretical.

If the promise of this compromise becomes reality, it will be a banner day for California’s technology and innovation community.  Given how instrumental the innovation economy is to our nation – and how desperately we need access to more spectrum – we are counting the days until we can say, “let the auctions begin.”